Hertz Global Holdings last week reported record second-quarter 2008 worldwide revenues of $2.3 billion, an increase of 4.6 percent over the prior year on strong international growth.
Revenue growth outside of the United States is a key element of the company’s diversification strategy, and revenues from international operations constituted 37 percent of worldwide revenues for the quarter, up from 32.4 percent. Overall revenue growth was led by a 5.2-percent increase in worldwide car rental revenues for the quarter to a record $1.8 billion. Revenues from worldwide equipment rental were a record for the second quarter at $443.3 million, up 2.4 percent over the prior-year period.
Second-quarter 2008 adjusted net income was $96.4 million, 1 percent lower than the second quarter of 2007, resulting in adjusted diluted earnings per share for the quarter of $0.30, the same as the prior-year period, with net income, on a GAAP basis, for the quarter, of $51.2 million, or $0.16 per share on a diluted basis, compared with a net income of $83.7 million, or $0.26 per share on a diluted basis, for the second quarter of 2007.
“We are accelerating our efficiency initiatives and now expect to reduce expenses by $300 million this year to help overcome higher inflation,” said Mark Frissora, the company’s chairman and CEO. “Additionally, we have generated $1.0 billion of levered cash flow over the past seven quarters, beating the target we set before the November 2006 IPO to generate a billion dollars of levered cash flow in 3 years. Net cash provided by operating activities for the same period was $5.3 billion.”
Worldwide equipment rental revenues were $443.3 million for the second quarter of 2008, a 2.4-percent increase over the prior-year period, while pricing decreased approximately 1.1 percent. HERC achieved solid growth outside of the non-residential construction business in the U.S. as well as strong double-digit growth in Canada, especially Western Canada where economic activity related to the oil industry remains strong.
The average acquisition cost of rental equipment operated during the second quarter of 2008 increased by 8.3 percent year-over-year — compared with a 7.3-percent increase in the second quarter of 2007 over the prior-year period — to $3.5 billion, and net revenue earning equipment as of June 30, was $2.6 billion, a 3.5-percent decrease from the amount as of Dec. 31, 2007.
For the full-year 2008, and based on current visibility of economic conditions, the company now forecasts total revenues of $8.7 billion to $8.8 billion. Corporate EBITDA is projected to be in the range of $1.40 billion to $1.465 billion and adjusted earnings per share are projected to be between $1.05 and $1.15.
Park Ridge, N.J.-based HERC is No. 3 on the RER 100.